https://cointhoughts.co/https://cointhoughts.co/favicon.pngcoin thoughtshttps://cointhoughts.co/Ghost 1.25Fri, 24 May 2019 12:01:02 GMT60tl;drObviously an inside job; total amateur hour. They'll catch the thief but Cryptopia will never re-open; plebs like you and me will eat the loss all around.

]]>https://cointhoughts.co/exchange-dividend-token-hit-all-time-low-one-week-before-alleged-3-5-million-hack/5c3e6b97213584693ef8721cWed, 16 Jan 2019 22:00:36 GMTtl;drObviously an inside job; total amateur hour. They'll catch the thief but Cryptopia will never re-open; plebs like you and me will eat the loss all around.

New Zealand digital asset exchange Cryptopia halted operations on Jan 14, 2019 and put the online platform into "unplanned maintenance mode", later announcing on Twitter the exchange "suffered a security breach which resulted in significant losses."

Cryptopia has not released details of the "breach" nor the specifics of their "significant losses", but large sums of ether and ERC-20 tokens have moved from their known hot wallets since the site went offline. Most of the assets are currently consolidated in a single ether account.

Trading volume on the exchange's CEFS markets, Cryptopia's tokenized shareholder asset, inexplicably increased significantly in the days leading up to the theft, yet there had been no meaningful announcement, news, or rumor related to Cryptopia or its operations. The trading action was led by steady sell pressure and pushed the market price of CEFS to a record low of 0.0503 BTC and a USD all-time low of $178.62. The token is down over 50% since Dec 24, 2018, just three weeks ago.

Such unprecedented sell-off of CEFS just before the theft of several million dollars in tokens is not a coincidence, I assure you; it indicates the crime was an inside job involving at least one major shareholder. Obviously the thief was blind with greed, aiming to dump the shares before nabbing $13 million, leaving behind loads of evidence likely to lead investigators right to him.

The latest news from Cryptopia confirms they, too, see strong evidence of an insider operation – law enforcement and government agencies were quietly notified and promptly stormed the company's offices and declared the facility locked-down while staff were interviewed. Management clearly believed the thief was still there, and I'll wager they have a good idea who was involved based on the sloppy, amateur execution and the blatant trading activity taking place beforehand.

One last thought, though... why bother stealing de-listed shit-tokens with no market or means to liquidate? Like, what will they do with 400k StarCredits?

lolwat

You will be sending your liberated Worldcoin to me, an old-school shitcoin miner from the dawn of CryptoTwitter and the internet's most devoted Worldcoin evangelist, rather than allowing Cryptopia to tyrannically seize the deposits of the dominant WDC market – effectively the only WDC market. There is no indication Cryptopia will make any effort to avoid further damage to the Worldcoin project. They froze the market without warning at the same time they announced the coin would be de-listed.

I am an OG Worldcoin fanatic who latched onto the shitcoin like a Civic cult-investor to Vinny Lingham. And I mean that, because I am willfully devoted to WDC with irrational optimism. I won't stand by while it dies at the hands of cold-hearted profiteers on a magic island that is literally on the other side of the world from everywhere.

Cryptopia will assume ownership of more than 6.5 million WDC, instantly becoming the second largest Worldcoin holder by a wide margin.

Pull your WDC out of this exchange if you can. Right now. If you have no other place to send the coins, consider withdrawing to the address below. I will put the coins to use for the benefit of Worldcoin. I promise.

Steve is championing the blockchain. He has mastered use of the conjunctive "as" in headlines to suggest a relationship between two disparate things. He is working on question headlines now, to refine his clickbait chops.

I recently launched the very first (and only, so far) dedicated crypto hotline. Its centerpiece is my daily market report which is always current, relevant, and informative, but there is much more to this public service if you listen closely.

After listening to the market report, callers are given several options to explore. Hear the unreleased soundtrack to the life of a high profile CryptoTwitter legend, transfer direct to the actual official crypto telephone support line, and join the dedicated open conference line and chat with other callers. Because why not?

This service is free (unless you are calling internationally and paying by the minute, in which case I assure you it is money well spent). It is open at all times for your entertainment. And it's an old school dial-in hotline because I am old and vintage tech gets me off.

Try it out. It's my gift to you. You will love it. Or else.

It's not just timely insight and veteran commentary - Darv's crypto hotline includes an option to route directly to @loomdart's mobile for prompt and courteous support for all your crypto needs. Call any time! https://t.co/8gB8PmBGsU

I can tweet brilliant commentary all day but only a handful of my 4000+ followers will see it. Stupid Twatter and their #shadowbanning

Stupid Questions You Might Have

Is this for real?

Yes. Give it a try, it's really not a big deal.

What is a "hotline"?

It's a phone number you can call to access time-sensitive information or provide tips and info to a specific cause.

What is a "phone number"?

In the olden days before the proliferation of pocket-sized hand-held network-connected supercomputers, there were fewer options for real-time communication and information access. The most effective option was live voice chat using a device known as a telephone or phone for short. Every phone was assigned a unique multi-digit number. Entering a phone's number sequence into any other phone using its 12-button key pad initiated a connection between the two devices. During this connected session both parties were treated to live, full-duplex audio transmission.

Was that boring? Doesn't matter. Your pocket computer has a phone app built-in, believe it or not, so you can make calls! Try it now by tapping the number: +1-302-660-0040

Why offer this for free?

Because it's fun and it's a joke. And I happen to have access to super affordable VOIP resources and the things needed to set this sort of thing up. I'm a nerd and I know lots of other nerds. Just enjoy the gag ok?

Snowflakes exist in a vivid and contentious reality bubble derived from a lifetime of participation trophies, helicopter parenting, and constant subjection to heart-breaking emotional and developmental abuse denied the freedom to make mistakes and learn from his own failures. It is an existence fraught with angst and irrational interpretation of sensory input to filter out everything that could challenge the Snowflake perspective and lead to critical thinking. This is why Snowflakes flock to Bernie Sanders and lack basic employment skills.

This flow chart can help you understand how Snowflakes cope with – and ultimately discard – information , emotion, actual things observed with the naked eye that doesn't align with their specific version of reality. They have to do this because any change to that reality means they had been mistaken; they were wrong. And it is legitimately terrifying because they don't know how to be wrong or broaden their perspective.

Snowflake existence is confusing, emotional, predominantly angry, and bubble-wrapped in fear. If they weren't so shitty about it all the time we might be more sympathetic to their plight.

]]>We have a global warming problem, but it isn't the one you think. The biggest danger facing us today over the environmental impact of humans is that, if you agree with the premise but not the solution, you must not agree with the premise. That's right, we're being taken down]]>https://cointhoughts.co/climate-change-disagreer/5bfd7b23213584693ef871b9Tue, 27 Nov 2018 19:46:10 GMT

We have a global warming problem, but it isn't the one you think. The biggest danger facing us today over the environmental impact of humans is that, if you agree with the premise but not the solution, you must not agree with the premise. That's right, we're being taken down by the faulty logic of group think.

Take, for example, the Fourth National Climate Assessment. If you love our planet and are a good person, chances are you will believe every page of the assessment because it follows the narrative: humans are killing the planet and we must do certain things about it It is imperative the government increase spending to do these certain things now.

Our irrationality is being exploited for money, which is no surprise. Consider the following: we all agree politicians are corrupt, yet when they ask for tax dollars to combat climate change we nearly rip the fold in our wallet because we can't get money out of it fast enough.

Here is another irrationality that is being exploited. Scientists do research to discover new facts, but scientists need funds to do that research. We all know people will say anything for money, yet when scientists are paid by politicians to say something, we unquestionably believe they are telling the truth.

The most successful exploitation of our irrationality is: politicians are corrupt, but not the politicians I support.

It is logical to assume this can be proven false, because it can, but it is irrational to think doing so would convince anyone to change their position; I can feel it in my heart that my politician is the one on the side of right. The only way forward is to accede - work with the idea that their politician has a heart of gold.

Let's assume the politician who supports these measures is genuine.

Is this politician also a climatologist? No, but her husband is. Does her husband compile all the research data that is used to formulate theories? No, but his son does. Does his son gather all the information that is compiled into usable data?No, but his best friend does. Does the best friendset up all the equipment to gather the information? No, but his sister does. Does his sister calibrate all the equipment that she sets up to gather information? No but her research partner does. Does her research partner make the equipment that he calibrates? OK, now I'm just being obtuse.

Someone along the way is making money by exploiting our fear of global warming and our assumption that all changes are bad. So before you write off your co-worker as a cuckoo conspiracy theorist, consider the following:

Combating climate change costs money. The worse the climate gets, the more money it will cost. That money is paid to companies who will combat climate change. Those companies will hire more scientists and workers to invent and implement new measures to combat climate change. Those measures will require materials and machinery. Someone will have to mine the materials and build the machinery. The machines will be housed in a factory. That factory will have to be built on land. That land will have to be purchased or leased....etc.

Does that sound like a failing economy or a economic boom?

Just for a moment, as a thought experiment, tune out your heart and your gut and listen to your head: our national debt is alarmingly high. When the government combats climate change, it takes your tax dollars and pays it out to a thriving industry that will only grow and become more profitable the worse the climate becomes.

Now ask yourself, does the co-worker who disagrees with more government spending hate our planet, or are you being used by corrupt politicians? If we look at history, whenever there are social consequences to having a differing opinion, that different opinion is inevitably on the side of right. Don't be a pawn, be your own person.

]]>On Twitter there is a behavior pattern where a person who has lost an argument redirects the narrative instead of owning up. Why is it so hard to admit we are wrong to a complete stranger we will never see again? Because it has nothing to do with them.

Physical

]]>https://cointhoughts.co/saying-im-wrong/5bf8e5a5213584693ef871b7Tue, 27 Nov 2018 17:12:20 GMTOn Twitter there is a behavior pattern where a person who has lost an argument redirects the narrative instead of owning up. Why is it so hard to admit we are wrong to a complete stranger we will never see again? Because it has nothing to do with them.

Physical pain centers light up when get the silent treatment and also when you lose an argument. These are biological clues that we are guilty of behavior that threatens our existence. In the first case, if you are rejected by your tribe, you're as good as dead. so the pain compels you to do whatever it takes to make them accept you again; anything to make the pain stop. Pain triggered by being wrong is like your dog trying to get through the electric fence. Until you move on, every time you approach that error, you're going to feel it.

On Twitter, when someone is wrong their final remark will certainly be insulting. They probably hold a grudge for a minute or two, as if you're the reason they're wrong. Punished for being right. Sheesh.

When I was younger, the pain of being wrong would persist because I focused on the wrong element of the situation: that I was wrong, not what I was wrong about. Once I decided to freely admit when I am wrong - own up to every argument where I am proven wrong - my levels of stress and anxiety changed forever.

Some might argue that I am not learning my lesson if the pain doesn't have a chance to ingrain the lesson. How long should you suffer because you thought the capital of Florida was Orlando? In fact, if you focus on being wrong, then you are likely to forget the thing you were wrong about in the first place.

The pain is a note-to-self that you shouldn't be focusing on something so trivial as a corrupt cell in a spreadsheet, especially since you are probably punishing the person who was right with a dirty scowl, if not worse. The punishment does not fit the crime of being wrong because it is punishment for not admitting you are wrong.

If there is an afterlife, I wonder if you can tune into modern times and watch it like a reality show...

Martin Luther King Jr. is sitting next to Gandhi, gesturing wildly and yelling at the screen while Gandhi just shakes his head; Jesus is sitting in the back talking quietly with John Paul III with a look of concern on his face; Hitler is sitting alone, on the edge of his seat, staring intently at the tv and barking at everyone to be quiet so he can hear better.

Ben Franklin is beyond annoyed and can't sit still, so he's pacing back and forth, muttering under his breath about "those idiots", and "taking everything so literally". He keeps shooting dirty looks at smug faced Einstein, the smiles in his eyes silently laughing at him....

Where does Franklin's mantra fail and Einstein's succeed? Why does one quote threaten to tear our social fabric asunder while the other stitches it back up? How does this impact third wave feminism?

It comes down to the the power of words.

Our brains are are both primitive and complex, a contradiction in terms which which gives us no insight into keeping our cool in the face of alethic pluralism. Concepts that are true in theory but false in practice are divisive, and none more than the idea that women can do anything men can do.

In theory, we don't have to be Einstein to understand this dualistic idea. In practice, Franklin's string of words have led western society into a bad case of pluralistic ignorance; in public, we nod together that "anyone can grow up to be President", and "all it takes is hard work" because if you want it badly enough, "nothing can stop you". But behind closed doors we come to our senses and stifle a snicker at the poor kid singing impossibly off key at auditions - because no amount of "hang in there" posters is going to fix that hot mess.

Even with the latest in machine learning technology, we have not yet invented AI that can definitively prove Franklin's inspirational message theoretically false. This is the case because Franklin included two variables with infinite limits: "you" and "anything". Einstein, on the other hand, instructs us look within ourselves to find the limit and accept it as valid before we even begin. In fact, since the limit is tailored to us, the mandate is optimized.

As individuals, we run the Franklin function by self-imposing limits we are comfortable with. As a group, we have no idea what limits to place. We keep exchanging looks that ask, what are you setting the limit to. Since no one is talking, the default lets collective consciousness set the limit. Well...that mind is so large we have to turn off error alerts and slog through stack overflow. At least, I assume our minds are bogged down and distracted and that's why the issue of gender discrimination doesn't seem to get better, no matter what we do.

I don't believe, in the least, that men are superior to women. Just as we accept that gravity acts on every object we drop, every time, for every story about a stupid woman who did something really dumb the misogynist presents, I have a counter example of an exceptional woman doing something brilliant. The burden is on him to prove it false; defining parameters, such as narrowing the slice of society down to a male-dominated industry, may prove that men are superior in male-dominated fields, but that's like saying apples are the best fruit for making apple pie.

There's no way you're going to change his mind, though. In the end he'll still insist women aren't as good as men, and that's where the problem lies. We can use the scientific method to uphold "a woman can do anything a man can do," but if we pluralize the language, "women can do anything men can do", we have to align every woman with an equal man before a conclusion can be summarized, and that involves a limitless number of associations, just like Franklin's mantra.

You might be thinking, it doesn't matter if you prove gender equality using logic: I have eyes. I would be lying if I said this somehow proves gender discrimination doesn't exist. I have eyes, too, but I'm no Einstein. He can answer the lingering question: how do we get rid of gender discrimination in a society that gives equal opportunity for all? "Once we accept our limits, we go beyond them."

It is disingenuous to expect Women to feel equal among men if there is an unfair advantage bestowed upon one of the genders. We have to stop demanding special treatment. We have to accept that certain industries will be male dominated - just as some will be female dominated - and stop coercing them into hiring under-qualified women.

For every action, there is an equal and opposite reaction. - Newton's Laws of Motion

Einstein can't help but smirk at Franklin because, for all his acclaim as a polymath, Einstein clearly had a better understanding of how the universe works. Diversity hiring programs feel good, but for whom? There is a cascade of problems we create every time with every instance of inorganic discrimination. One of those problems is an obfuscation of the organic discrimination that persists in the shadows of purposefully generated bias. How do we eliminate imposter syndrome without stemming the tide of imposters?

I agree that certain industries need more diversity, but you cannot take an individual and turn her into something she is not.

The solution is not to change the people, the answer is to change the industry.

This is how you make room for a woman on your team: ask the men what they hate about their jobs. Et, voila! Women with high math ability have even higher verbal ability, and tasks requiring verbal skills are the most disliked tasks among men with high math ability.

If you are a manager at a tech company, here's a fun trick to play. Call one of your product development teams into your office and tell them , "we need more diversity, so we're hiring a woman to join your team."The pressure in the room from all the heavy exhales will make your ears pop.

Then follow up with, "she's going to stand between act as a liaison between you and management but her main task is to make sure the solution is

ensure your product is aligned with the requirements and "A hound is centrally focused on discovering what the user really wants. They are observing and interviewing multiple users, discovering patterns, and identifying areas of opportunity for the team to innovate. They keep the core focus on the user so the team does not get married to a solution, but focuses on creating a solution that is actually solving a problem for the end user."

For just a moment, Franklin feels a surge of unfairness. It's not his fault the editor cut out the succeeding clause. What he actually said was, "You can do anything you set your mind to; and to which your body is able."

"Oh, Ben," chuckles Einstein, "even if you did say that - YOU were the editor!"

This content was posted on twitter and is re-published here due to twitter's disgusting, cruel, and totalitarian form of censorship known as "shadowbanning" specifically designed to manipulate visible content within their platform in order to perpetuate a false reality wherein thoughts, ideas, and opinions not aligned with the shared opinions of the corporation's staff are quietly censored. This is preferred by twitter instead of disabling user accounts or otherwise informing users they are not welcome on the platform because the user doesn't know the action has been enforced against them. Instead, they feel like no one cares about their posts anymore, and ultimately they are compelled to quit trying. Need proof? See this and this and this for detailed explanations from actual twitter employees.

Ladies and gentlemen and neckbeards of the blockchain community, I give you Our Savior:

See what she did there, right in the beginning? She performed an actual miracle while being taped in front of a live audience, and we needed it. Diana deftly explained a fundamental cryptocurrency function to normiesAND planted a critical seed of understanding how a thing that arguably does not even exist can become a store of value and play a significant role in global commerce.

I shit you not, my actual parents stopped asking me what bitcoin is and why anyone cares to pay for it since I tricked them into watching this talk even though it has the word “blockchain” in the video title (sedatives and browser settings trickery ftw). They re-watched it three times and then added Biggs to their Christmas card recipient list (sorry in advance, Diana).

Later I showed Diana’s blockchain talk to the neighbor kid and he’s already killing it on the shit-token markets with Intermediate trade setups that I didn’t even know were possible. And he just turned seven last week and I’m talking bouncy-castle-and-fat-kids-puking-up-cake-and-Pepsi seventh birthday party (yes I barfed in the bouncy castle). Then, last Tuesday, I stepped away from my laptop for a few minutes and returned to find my dog, who is surely below average dog-intelligence, listening to Diana’s talk with his head tilted and ears perked and not even drooling or panting. He’s 10 and has not lived one full minute of the past decade without panting and drooling on stuff I own. This morning I received an email from Kraken support staff apologizing to my retriever about the delay in clearing him for Tier 2 verification. I looked at him and he was staring at a wall drooling on my shoe, then I looked at my shitcoin bags on Poloniex and they were all in the red so I ragedumped everything PERFECT TRADE!.

Before Diana’s presentation was filmed and uploaded to YouTube, we in the bitcoin and crypto space were consistently failing at explaining anything about blockchain tech when questioned by friends, family, co-workers, and 900-number phone sex operators. We only made things worse and tons of us have become mega outcasts at work and abandoned by IRL friends because we sound like condescending assholes when we try to describe how amazing blockchain is and why it's the only thing that matters and how superior we are for buying drugs with it in 2013 when it was like ten bucks a coin or something.

Unable to communicate with the general public about such meaningful technology, we stopped answering the questions and embraced our new identities. We quit our jobs and allowed our neckbeards to flourish, only trimming the hair on our faces when it really interfered with eating. We befriended dozens of characters on Twitter with the word “crypto” in their names who may or may not be actual humans (or just one twisted human with nothing better to do), and they taught us lingo like "hodl" and "normie" and "pamp". We realized we are superior and normies are ignorant and... you know what it’s probably time to buy more ETH because bitcoin is slow and old and not Turing-Complete and ether is only like $500 and it’s totally fine there are 99 million in circulation and infinite total supply because it’s amazing and super undervalued all the time.

I am sincerely grateful this video now exists and begins with an effective answer to some questions frequently asked by just about everyone outside my tiny community of blockchain and cryptocurrency enthusiasts. And yes, send a link to Diana’s presentation to your parents or friends or acquaintances the next time they ask you about the technology. But we should also study Diana’s appproach until we, too, can field questions from normies in real-world, face-to-face interactions (barf). After all, what does it say about us that we struggle to explain the basics of the very thing with which we have become so blindly embroiled? And if you are suddenly in possession of significant wealth you did not have six months ago it is probably a good idea to be damn sure you can explain the basics of your source of wealth at least as effectively as Ms. Biggs.

Aaaaaand he’s guilty. For all the scams and lies and absurd promises and outrageous claims. Josh Garza, the jackass behind Paycoin and the hilarious GAW Miners ponzi of 2014, is pleading guilty to federal charges and faces up to 20 years in the slammer. If this is a long-forgotten story you can revisit previous posts here and here for a refresher.

Basically dude sold non-existent cloud mining packages and then made a shitcoin (Paycoin) and topped it off with various impossible promises and ridiculous claims. The whole thing imploded and he disappeared. The real question is: Why the hell didn’t he flee to China with BigVern?

Yesterday I woke up to a deluge of comments and messages related to my post on GAW Miners CEO Josh Garza’s buyback program for the controversial digital currency Paycoin. I frantically recalculated my numbers to correct the post for factual accuracy but made an arithmetic mistake that reduced the

Yesterday I woke up to a deluge of comments and messages related to my post on GAW Miners CEO Josh Garza’s buyback program for the controversial digital currency Paycoin. I frantically recalculated my numbers to correct the post for factual accuracy but made an arithmetic mistake that reduced the impact of the point I was trying to make with my post in the first place.

I had originally stated that it could take up to 300 years for Garza’s buyback program to complete, should all the XPY in circulation be sent in to the $20 “Honor Program”, but that number was based on an incorrect amount of XPY in existence. When I found (thanks to my readers) a reliable source showing the actual amount of XPY in existence, I then made a simple mistake while doing some basic arithmetic and came up with a value of 4.6ish years. But that was wrong!

It really will take a lifetime…

There is no question Garza’s “Honor Program” is misleading. If you don’t see that this is an obvious attempt to buy time (potentially a literal lifetime) for his failing project, then I suggest you take a few steps back and examine the facts surrounding Paycoin and Garza’s actions over the past six months or so.

]]>

I know I have been posting about digital currencies a lot lately, so my apologies for not keeping things varying in terms of topics this week. I’ll be back to writing about other stuff and posting photos before long, I promise!

A New Chapter

I know I have been posting about digital currencies a lot lately, so my apologies for not keeping things varying in terms of topics this week. I’ll be back to writing about other stuff and posting photos before long, I promise!

A New Chapter

We are witnessing a pivotal moment in cryptocurrency history right now. The endless pump-and-dump altcoin launches, ICO scams, POD scams, and pointless litecoin clones that dominated much of 2014 are officially done for, by my measurements. Enough of the world’s technology visionaries have studied blockchain tech and already placed themselves or their companies in strategically advantageous positions for the next phase of the movement. And that’s just what we know about from public news outlets and backing or support from VCs, corporations, and governments. There are some very large hands in the pot already – highly influential organizations and people executing long-term strategies to give them a significant advantage in a not-too-distant world in which this extremely disruptive technology changes the way business is conducted on macro and micro scales.

Let Loose the Bulls

In the past 24 hours bitcoin dropped from roughly $250 to a low of $166 (more or less, depending on which exchange you examine). It has been one of the most significant movements in the USD value of bitcoin in quite some time – a 34% drop in value in 24 hours! While I am by no means even remotely an expert in economics, currency or commodity trading, and especially not BTC/USD trading (my recent trading performance has been downright depressing), it is my opinion this dramatic event marks the beginning of the end of the downtrend. A downtrend that began just over a year ago when BTC hit an all-time high of $1216.73, then almost immediately began a painful descent to where it is now. This sounds terrible, and indeed bitcoin was among the worst performing investments of 2014. But keep in mind, for the sake of perspective, that on Jan 1, 2013 bitcoin was trading at just over $13, making it one of the absolute best performing assets over the past two years.

To me, however, a clear signal that bitcoin is absolutely oversold is the sentiment among individual traders, particularly the very loud group of teens and twenty-somethings on Twitter who ramble on day in and day out about the supposed uselessness of bitcoin, making short-sighted statements about the end of bitcoin after today’s crash as they make mountains of the currency playing the volatility of a day like today with margin trading.

Someone even said to me tonight “There is no way btc goes up again… no way it goes up ever. It’s just the end of four bubble cycles of a worthless asset.” Followed by “No one cares about disrupting anything, they care about getting more dollars.” The last part is true – money and profit tend to drive decisions in a capitalist society – but what this particular person is missing is that the disruption is already underway. It is inevitable, and for those who are correctly positioned to take full advantage of that inevitability many more dollars will be flowing toward them as the world moves to a fantastically different financial ecosystem on the back of blockchain technology.

When the bearish rhetoric reaches this level, this fever pitch of doom and gloom spewing primarily from a group of a generation notorious for its lack of perspective and real-world experience, that’s when I start buying. I did, in fact, take the measly sum of cash languishing in my brokerage account and purchase BTC a couple hours ago, just $10 above its 24-hour low (lucky call, maybe?). That’s how convinced I am that the bulls are ready to run.

I don’t predict markets. First of all I have a pathetically poor performance history in trading, whether it’s stocks or digital currencies. But today feels a lot like a specific day that I won’t soon forget from 2008 when I took a look at a handful of blue chip stocks and, having not closely followed the entirety of the preceding downtrend, had a gut feeling that many of them were ridiculously oversold. I bought DELL for $8 and CVX for something like $70, among a few others like MSFT. It was a rare moment in my overall frightening history of trading where I felt like it was obvious that those companies were hugely undervalued. Thankfully, I was correct!

I’m not saying I am correct today. And I certainly won’t be surprised if it takes weeks or even months before the downtrend in the BTC/USD market officially reverses. I’m just saying that it looks to me like a whole lot of emotions on this topic are being spewed out of the public fire hose that is Twitter, and those opinions appear to be extremely short-sighted and lacking perspective – and they’re driving financial (trading) decisions among a large group of bitcoin traders. How easy it is to forget the bigger picture, the implications of the underlying technology, and the inevitability of change that will be brought to the world by blockchain technology. To me, it’s like the early 1990s with the internet, when a few insightful people saw the long term implications of instant global communication and ubiquitous broadband connectivity. Those people are celebrated today for changing the world. I am not one of those people, but I see people just beyond the crowds of bearish day-traders who look a lot like them, building systems, products, and infrastructure that will someday make possible the incredible disruption we will witness thanks to bitcoin and its successors.

If you’ve been following the whole Paycoin debacle in the cryptocurrency community, you know that it has been similar to countless other pre-mined, ICO-style coin launches. Lots of promises, price targets, and hype followed by a reality check when the free market takes over and all the people who believed the hype wound up buying an overpriced altcoin that they’ll never get a positive return on (aka “bag-holders“).

Garza’s Role

After Josh Garza, CEO of GAW Miners and the public face of Paycoin, backpedaled frantically on his promise to buy any and all Paycoins at a guaranteed price of $20 each the whole thing pretty much fell into line with nearly every other altcoin that has ridden a wave of extraordinary hype followed by a market crash in the span of 72 hours or less. Those who were convinced that the hype was real wound up holding bags of virtual money they paid way too much BTC for with no way to exit anywhere near their break-even point. Meanwhile Garza and his alleged partners and/or early investors made a killing selling miners, "pre-mined" coins, and GAW’s newest ingenious product, Hashstakers, to the thousands of people who are now officially bag-holders.

Paycoin went from 0.05 BTC to 0.01 BTC in about a week

I’ve been involved with GAW’s cloud mining service since the very beginning, when a hardware mining device I purchased from GAW (they used to be in the business of selling re-branded Chinese scrypt mining equipment) came with a complimentary cloud equivalent in their new online mining platform, Zencloud. In the beginning, the profits were fantastic, and I wound up purchasing about 150 Mh of cloud miners from them early enough that I actually did see full ROI before all this Hashcoin/Paycoin stuff began. Being entirely in the black on the whole thing, I had absolutely nothing to lose by sticking around to watch the Paycoin saga unfold and possibly even make some additional profit from it.Long story short, when Paycoin finally hit the public exchanges, the price fell to around $8 in under 36 hours. Garza was taking flak from thousands of bag-holders and was (allegedly) even contacted by a federal agency regarding his promises to manipulate the price of the commodity to a specific dollar amount on the open market.

Garza’s Latest Scheme: “Honor”

Having watched Josh Garza’s actions, statements, and endless public commentary for months now, I have a pretty good feel for his modus operandi. The man is a salesman, and a rather good one, to be honest. He has had a seemingly unlimited number of spins and gimmicks up his sleeve throughout the Paycoin launch and subsequent disaster. He is a talented and experienced liar, and he is skilled at making money. He also is more than willing to bend ethical boundaries in order to accomplish his goals.

So when he published this announcement tonight stating that he would, in fact, uphold his promise to buy every last Paycoin on the market for $20, I read it with great interest. And then I read it again. And again. And again. Because something just wasn’t right about it, but I was having trouble pinpointing exactly what the scam was this time. Then a friend of mine sent me the link to this statement Garza published on his heavily-moderated forum website, which I am including as a screenshot below since he is likely to update or remove it at a later date when he realizes it reveals too much about the scheme.

I am a man who stands by my promises… [even if it takes 91 years.]” -Josh Garza, Jan 12, 2014, on buying Paycoin for twenty dollars each

How the scheme works

Garza creates the Paycoin Honor Program which consists of a “vault” to hold Paycoins owned by people who want to get the $20 per coin they were promised. Managed by an “authenticated” third-party, it is effectively an escrow account. Would-be participants have 30 days (Feb 1 through Mar 2, 2015) to sign up for the program. Here’s the tricky part: Garza guarantees he will purchase $100,000 worth of Paycoin each month from the escrow account. Eventually everyone who wanted $20 Paycoin will, in fact, receive that amount of money for each of the $XPY they send to this service after signing up (which requires unspecified “account verification”, by the way).

If everyone sends their Paycoin to the “Honor Program” it will take 91.6 years to complete the $20 buy-back program

If you wait long enough…

It sounds great on paper because $100,000 sounds like a lot of money. But let’s do some math. There are approximately 12,400,000 XPY in existence, 6.9m of which are locked up in “prime stakers” (source). If the remaining 5.5m or so Paycoin were sent to this Honor Program escrow wallet, it would take 91.6 years to buy them all for $20 at $100k per month.

Obviously not everyone is going to do this. There are the almost cult-like followers who actually believe they’ll be able to use Paycoin to buy goods from Amazon and Walmart at a discount (which Amazon has publicly refuted many times). There are plenty of investors (now bag-holders) who just want out of this mess and are waiting for the open market to give them an exit opportunity that will minimize their losses or possibly even result in a little profit. And there are surely a large group of individuals who were convinced to purchase Paycoin at ludicrously high prices after reading about it in off-beat news, blogs, or whatever. The last group may consist of a good number of people who’s first experience with digital currency is Paycoin simply because Garza did such a good job with PR and probably brought a lot of new people into the scene. Those poor unfortunate souls. 😉

Even if only 500,000 XPY are sent to the program it would be 8.3 years before every last participant were paid $20 per coin. If you think Paycoin will even be around in 8 years, well, I am impressed with your optimism!

So, that’s Garza’s latest scheme. It is obvious that he is doing at least two primary things with this plan:

1 – Buying time. Like, potentially more time than most of us even have left to live!

2 – Removing Paycoin from the marketplace for what might as well be a lifetime. Is this good or bad? Maybe good for those who don’t send their XPY to the program because it will increase scarcity (that would certainly include Garza himself!), but bad for those who do send their coins in because they aren’t likely to ever be completely bought out before GAW dissolves, cryptocurrency technology is replaced with something superior, or everyone dies of old age.

Upon reading that announcement it is clear he does a fantastic job of hiding the facts, doesn’t he? Most people outside my profession don’t realize it, but knowing how to effectively and efficiently use Google is a seriously major portion of my job as a systems engineer, web developer, and technical project manager; and it took me about 4 minutes and half a dozen web searches (meaning the information is rather difficult to find) to locate a breakdown of how many Paycoins even exist and what the original distribution of the coins was:

PayCoin is a PoS/PoW currency based off of Peercoin and that runs SHA-256. It will have 12.5 million coins total in the PoW stage available for mining, but 6.5 million coins were reserved by GAW for their large investors and 5.5 million coins for customers who collected HashPoints to trade in for their equivalent PayCoins.

Just one more scammy facet

There’s always more, too, and frankly it’s difficult to not go off on another 1,500 word tangent from here, but I will keep it short.See how the numbers in the quoted section above make it sound like crypto currency miners, like me, had an excellent shot at earning some of the 300,000 or so Paycoin that were released during the (very brief) proof-of-work phase? Well, keep in mind that GAW is a mining company and they are reported to control 5 petahashes (of 288 total) of the bitcoin mining network, which is about 1.73% as of Dec 1, 2014. That is a LOT of mining power, and you can bet every last bit of it was mining Paycoin during the short mining window after the coin was launched. Just one more example of how skilled Garza is at misleading people.

And finally we come to the part of the equation that I give Josh Garza extra credit for in the Evil Genius category. Similar to how Hashstakers work, this Honor Program has a powerful side-effect for the XPY market overall: it takes even more Paycoins off the market, locking them up for years in a “vault” (as Garza called it in the announcement). This increases the scarcity of XPY on the open market, which in theory, and based on elementary economics, will make it much easier for Garza to manipulate the market in a bullish direction, since he not only (presumably and very likey) controls the vast majority of XPY in circulation but also has the raw capital to gradually push the price higher and higher. This fits in nicely with his overall business plan of turning Paycoin into a digital currency that people will actually use in everyday ecommerce transactions, but through which they will have to pass one or more of Garza’s gateways each time they want to spend it.

We know Josh Garza is willing to hide extra fees wherever possible. We know he’s willing to lie to the public. We know he is pulling the wool over our eyes with this latest scheme. So, if you’re going to be involved with Paycoin, just be aware that every aspect of it has a hidden cost, a twisted truth, or in some cases is a bald-faced lie. One thing is for sure: Josh Garza is not a benevolent and transparent businessman. Rather, he is a shady, well-dressed salesman who wants to lock up your Paycoin for 91 years and call it “chang[ing] the world of commerce and finance.”